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BlackBerry's Indian Demand Slumps - Analyst Blog

Research In Motion Limited
(
BBRY
) continues its trend of losing market share even in the densely
populated Indian market. Per the research firm IDC, the company's
handset shipment dropped to 5.9% from 12.8% in 2010, still better
than its overall market share of 4.6%.

Research In Motion, which once dominated the smartphone market
failed to upgrade its operating platform, losing market traction
to
Apple Inc.
's (
AAPL
) iOS and
Google Inc.
's (
GOOG
) Android operating systems during the past few years, mostly in
highly developed countries of North America and Europe. In 2012,
the company sold nearly 32.5 million smartphones as compared to
Samsung Electronics' 216 million and Apple Inc.'s 136 million
handsets.

In a bid to keep its handset business alive, Research In
Motion slashed its smartphone prices to target emerging nations
like China and India. Both these countries are having huge mobile
subscriber base and are less influenced by high-valued
iPhones.

Moreover, people of these two countries are highly price
sensitive and BlackBerry devices perform better on less advanced
wireless networks. So, selling its smartphones at lower price
points will trigger huge demand across these nations.

Indian mobile phone market represents nearly 150 different
handset manufacturers selling mostly feature phones. Therefore,
selling of smartphones by Research In Motion at a much reduced
price coupled with the roll out of 3G services across the country
will further propel demand for smartphones in the forthcoming
years. Indian feature market grew 16% year over year while
smartphone market expanded 48% annually.

However, Research In Motion's objective to gain market
traction in developing nations like India seems to be a distant
dream as the country is hugely dominated by Samsung devices and
Nokia Corp.
's (
NOK
) Asha range of low-end smartphones. Moreover, home-grown handset
makers like Micromax and Karbonn are continuously launching low
priced Android-based smartphones, thereby intensifying
competition within the low-end smartphone market.

To retain its market share in a mobile crazy country like
India, Research In Motion launched its new BB10-based Z10
smartphones, which supports QNX-based open-source platform like
Android and iOS. Hence, it remains a big test for the BlackBerry
maker to keep its business going in an emerging country like
India.

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